Labor Department approves investing pensions in 'woke' ESG-only funds
Some investment groups have welcomed the Labor Department's rule, while Republican lawmakers have stood against it.
The U.S. Labor Department announced plans to allow pension fund managers to "consider climate change and other environmental, social and governance factors," also known as ESG, when choosing investments.
In an announcement about the final rule last week, the agency criticized the Trump administration, stating, "the department concluded that two rules issued in 2020 ... unnecessarily restrained plan fiduciaries' ability to weigh environmental, social and governance factors when choosing investments, even when those factors would benefit plan participants financially."
Labor Secretary Marty Walsh said, "Today's rule clarifies that retirement plan fiduciaries can take into account the potential financial benefits of investing in companies committed to positive environmental, social and governance actions as they help plan participants make the most of their retirement benefits."
Texas Comptroller Glenn Hegar (R) criticized the Labor Department's announcement.
"Once again, President Biden is using unelected bureaucrats at the Department of Labor (DOL) to push his radical environmental, social and governance (ESG) agenda, undermine the Texas economy and jeopardize our national security and energy independence," Hegar said.
Congressional Republicans have reportedly been planning on getting rid of Biden's investment rules for months, dependent upon the results of the midterm elections.
However, some investment groups have welcomed the Labor Department's rule, such as Voya Financial.
"We are fully supportive of the DOL's final rulemaking permitting consideration of ESG factors in investment decisions within retirement plans," said Voya executive Heather Lavallee.